New System Development Widespread Among Insurance Carriers

But how prevalent is new system activity at insurance carriers and what rationale is driving the decision to move forward with the investment?

Based on a study of property-casualty insurers conducted by Ward Group and observations of client activity, system replacement across the insurance industry is widespread. Only a small percentage of the companies that participated in the study–less than 10 percent–are not currently participating in a major system implementation project. Prior to the last three to five years, companies were heavily focused on policy administration system replacement rather than claims system development. Consequently, 71 percent of the companies are still in the process of completing a policy system replacement. More recently, companies have focused on claims with half the companies in the study indicating they are implementing new claims systems. About one third of the companies are developing a billing system. In particular, personal lines companies are replacing all of their systems at a greater rate than commercial lines companies.